As part of an effort to ensure the provision of qualitative and efficient telecommunications services throughout the country, the Nigerian Communications Commission is set to license Mobile Virtual Network Operators (MVNOs).
The telecom regulator, NCC stated MVNOs licensing will help generate employment and bridge the gap between the unserved and the underserved in society. It will also further engender competition and provide choices for telecommunication consumers, the commission noted.
MVNO is a telecommunications product and service operator that leverages the capacity of a fully Licenced Telecommunications Service provider or Mobile Network Operator (MNO). The MVNO reaches a “Wholesale Agreement” or “Revenue Sharing Agreement” with the telecommunications company through negotiations and delivers its services after bulk-purchasing resources from the telco.
The defining difference between an MVNO and an MNO is that the former has no ownership whatsoever of spectrum elements, irrespective of its operational model.
One of the major objectives of Mobile Virtual Network Operators (MVNOs) allow providers of virtual mobile communications services an opportunity to participate in the telecom provisioning market of Nigeria, with an emphasis on improving the telecom output of the country.
Speaking on this, NCC said the Mobile Virtual Network Operators license is a five (5) tier classification that has distinctive services to be offered by the players in different tiers.
The Commission however says mobile network operators are not eligible to apply for the new license.
According to the Mobile Virtual Network Operators guidelines released by the NCC earlier this year, the cost of the license which comes in 5 different categories ranges from N30 million to N250 million.
In terms of the roll-out, the licensee must ensure that its services are rolled out within 12 months of obtaining its license and is expected to stick to the terms of the agreement as stated in its business proposal and service delivery within the Mobile Virtual Network Operators agreement with Mobile Network Operators.
According to NCC, the license is subject to revocation or suspension under the same conditions set within Condition 21 of the Unified Access Service license framework. The license can also be revoked or suspended if the licensee violates the MVNO agreement between itself and the MNO, or violates any of the conditions stated within this framework and the license can be revoked. If a licensee operates beyond the scope of the tier it has indicated and paid the license fees for.
Explaining the layers, NCC said Tier 1 operators are the Services Virtual Operators. This tier leverages its ability to offer services to its customers without owning any switching or intelligent network infrastructure. They do not control any numbering resources. Responsibilities lie with the host licensee to provide wholesale capacity to the V.O for delivery of its products and services.
Tier 2 is the Simple Facilities Virtual Operator, which assumes more control of the value chain, which allows it to significantly differentiate itself from its host. The VO does not have Core Switching and Interconnect capabilities but can set up its own Intelligent Network (IN) to provide its own IN services to the customer.
Tier 3 are Core Facilities Virtual Operators, which rely on its technical and commercial prowess to launch and operate a full core network with switching and interconnect capabilities.
Tier 4 are Virtual Aggregators/Enablers, responsible for aggregating and/or enabling VO services within the market. It relies on a model in which it stands as a middleman between the MNO and multiple VOs.
Tier 5 are Unified Virtual Operators. A VO within this tier can decide the level of service it desires to offer ranging from tier – 1 to tier – 4. This gives the VO freedom of choice to deploy its services the way it deems fit as long as it still has a valid license.
NCC also noted that Tier 1-4 entrants are expected to pay 5% of the License fee as-non-refundable administrative charges, while tier 5 entrants are to pay Fifty Million Naira (N50, 000,000.00) non-refundable administrative fees prior to negotiations with the MNOs.